Medicaid and the ER

Somebody had the notion that if people were on Medicaid they would see the doctor before having to go to the ER. This would save money. Guess what, people on Medicaid go to the doctor more AND they go to the ER more. This doesn’t save any money! It costs a whole lot more!

“I would view it as part of a broader set of evidence that covering people with health insurance doesn’t save money,” says Jonathan Gruber, a health economist at the Massachusetts Institute of Technology, who has also studied Oregon’s Medicaid expansion but is not affiliated with this study. “That was sometimes a misleading motivator for the Affordable Care Act. The law isn’t designed to save money. It’s designed to improve health, and that’s going to cost money.”

Yep – valuable stuff costs money.

And then later,

For those who want to argue that expanding Medicaid is a free lunch, this is bad.

Yes – the argument is completely wrong.

Here is Sibelius making some version of the argument:

“Our health care system has forced too many uninsured Americans to depend on the emergency room for the care they need,” she said in a July 2009 statement. “We cannot wait for reform that gives all Americans the high-quality, affordable care they need and helps prevent illnesses from turning into emergencies.”

And now we know that giving people insurance doesn’t reduce ER visits, it increases them. Surprise, surprise: give people something of value and they take more of it than if they have to pay.